Nokia plans another 1,700 layoffs worldwide

Layoffs announced as consumer demand for Nokia's smartphones continues to fall

Nokia Tuesday announced it will lay off 1,700 people worldwide in sales, marketing and various management areas as consumer demand for its smartphones continues to fall.

The most recent changes are intended to increase cost-efficiency, according to a brief statement issued Tuesday. Some of the layoffs are "scaling" sales and marketing to "match the pruned [product] portfolio and global consumer demand." Others eliminate jobs no longer needed as a result of the Symbian acquisition and subsequent spinoff as an open source foundation.  The layoffs also include reductions in the R&D unit for the company's devices group.

View a slideshow on the most notable layoffs of 2009.

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Nokia Tuesday announced it will lay off 1,700 people worldwide in sales, marketing and various management areas as consumer demand for its smartphones continues to fall.

The most recent changes are intended to increase cost-efficiency, according to a brief statement issued Tuesday. Some of the layoffs are "scaling" sales and marketing to "match the pruned [product] portfolio and global consumer demand." Others eliminate jobs no longer needed as a result of the Symbian acquisition and subsequent spinoff as an open source foundation.  The layoffs also include reductions in the R&D unit for the company's devices group.

View a slideshow on the most notable layoffs of 2009.

The statement also says the Finish-based cell phone giant will start talks with the unions about the cutbacks. Bloomberg reports that a Nokai spokeswoman says about 700 workers in Finland are likely to lose their jobs. Nokia is forecasting a 10% drop in sales this year. At the end of 2008, Nokia employed 128,445 worldwide, according to Bloomberg.

In the fourth quarter of 2008, Nokia sold 15.5 million smartphones, down from 18.7 million for the same period a year earlier, according to Gartner, a drop of nearly 18%. Its share of the global smartphone market dropped to 41% for the quarter, compared with 51% a year ago. In January it again cut its industry sales forecast.

Nokia is continuing to release new products into the down market, including its latest E-series handhelds aimed at the enterprise market. Though still best known for its phones and other mobile devices, Nokia is again reinventing itself, this time as provider of a growing range of Web-based services aimed at mobile users -- most recently a planned applications store, with features based on the user's location and networks of friends.  

Bloomberg reported that Nokia has lost more than half of its market value, dropping 55% in the past year. Its stock price has slumped from a high of about $34 per share in April 2008 to $10.91 per share a few days ago. U.S. rival Motorola is in even worse shape: Its market value dropped by 61% in the past year.

Previously, Nokia announced it would chop its dividend, the first such cut in seven years, according to Bloomberg. In January, Nokia announced plans to cut yearly costs by just over $900 million for its devices and services groups by the end of 2010. In February, it began offering resignation packages to employees and encouraging them to take unpaid leave to cut costs.

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